Appeal of Moon Township

• Decision Date: 27 November 1956
• Docket Number: 3757
• Citation: 127 A.2d 361,387 Pa. 144
• Parties: Appeal of the TOWNSHIP OF MOON and Moon Schools Union School Appeal of BOARD OF PROPERTY ASSESSMENT, APPEALS AND REVIEW Appeal of COUNTY OF ALLEGHENY (No. 211). Appeal of TOWNSHIP OF MOON and Moon Schools Union School
• Court: Pennsylvania Supreme Court

127 A.2d 361

387 Pa. 144

Appeal of the TOWNSHIP OF MOON and Moon Schools Union School District from the Assessment of The Greater Pittsburgh Airport Property in Moon Township. Appeal of BOARD OF PROPERTY ASSESSMENT, APPEALS AND REVIEW OF ALLEGHENY COUNTY (No. 210). Appeal of COUNTY OF ALLEGHENY (No. 211). Appeal of TOWNSHIP OF MOON and Moon Schools Union School District (No. 28).

No. 3757

Supreme Court of Pennsylvania

November 27, 1956

Argued October 1, 1956

Appeals, Nos. 210 and 211, March T., 1956, and No. 28, March T., 1957, from order of Court of Common Pleas of Allegheny County, Apr. T., 1955, No. 604, in re Appeal of Township of Moon and Moon Schools Union School District. Order affirmed reargument refused December 21, 1956.

Proceedings upon appeal by township and school district from decision of Board of Property Assessment, Appeals, and Review exempting airport property from taxation. Before MONTGOMERY, J.

Order entered sustaining appeal in part. Board of Property Assessment, county, township, and school board, respectively appealed.

The order of the court is affirmed.

Robert Van Der Voort, Solicitor, with him John F Healy, and Van Der Voort, Royston, Robb & Leonard, for township and school district.

Maurice Louik, Assistant County Solicitor, with him Nathaniel K. Beck, County Solicitor, and Philip Baskin, Assistant County Solicitor, for County and Board of Property Assessment.

Before STERN C.J., JONES, BELL, CHIDSEY, MUSMANNO and ARNOLD, JJ.

OPINION

MR. CHIEF JUSTICE HORACE STERN

The problem here relates to the taxability of certain portions of the Greater Pittsburgh Airport. The Board of Property Assessment, Appeals and Review of Allegheny County assessed the property of the Airport for the year 1953 at a total of $12,913,139, of which $5,451,849 was allocated to land and $7,461,290 to buildings, all of which was placed by the Board in the tax exempt column. The Township of Moon, in which 930 of the 1540 acres of the Airport are located, and the Moon Schools Union School District, appealed to the Court of Common Pleas from this action of the Board, claiming that a large part of the Airport should not have been declared tax exempt. The County of Allegheny, which is the owner of the Airport, intervened in the proceedings. The court below concluded that certain portions of the property which it enumerated were taxable, others not. The Board of Property Assessment and the County of Allegheny appeal from the order of the court to that effect. ^[*]

The Greater Pittsburgh Airport contains the usual runways, hangars, and taxi and loading apron areas, also a Terminal Building said to be the largest of its kind in the United States, two outdoor parking lots holding 1200 cars each, an automobile service station and a radar station, together with a number of other structures including two small dwelling houses. The Terminal Building itself is a multi-story building, the first or main floor of which contains the ticket offices for the various air lines and most of the concession areas hereinafter referred to; on the other floors are located the offices of the Weather Bureau, the Civil Aeronautics Administration, and some additional concession areas; the Federal Government also maintains a post office department in the building. Approximately 100 acres of the Airport property are allocated to Federal military use, including the housing of its personnel, and the Commonwealth of Pennsylvania has its own buildings on the Airport.

The concessions above referred to are agreements entered into by Allegheny County as owner of the Airport, whereby it rents large amounts of space in the Terminal Building and area adjacent thereto to private individuals and corporations for the carrying on therein of private business for profit. The agreements provide for the payment to the County of a net minimum amount per month and, in addition thereto, a percentage of the gross sales; the concessionaire also agrees to indemnify the County from all liability for taxes or assessments that may be levied upon it because of the concessionaire's operations. The business activities carried on in the Terminal Building by these concessionaires are as follows: jewelry store, display windows and display areas, drugstore, news stand, 60-room hotel, night club, banquet rooms, coffee shop, cafeteria, cocktail lounge, tavern, service bar and roof patio, sandwich shop, bakery, check rooms, roof garden restaurant and cafe, amusement arcade, barber shop, confectionery, parking garage (indoor), women's apparel shop, garbage and rubbish collection service, dairy bar, toy shop, car rental service, fruit store, wholesale lumber sales office, catering service, insurance agency, taxi service, limousine service, gift shop, motion picture theatre, linen supply service, coin-operated binoculars, parcel lockers, toy sales stand, steel company sales office, private lounge and bar, bank, and real estate office. The outside areas leased to concessionaires are the parking lots, the refreshment stand, comfort station and automobile service station, while the two dwelling houses are rented to private individuals. Of all these activities the court held that only the areas occupied by the coffee shop, cafeteria, sandwich shop, check rooms, barber shop, parking garage, garbage and rubbish collection service, catering service, taxi service, limousine service, and parking lots, were tax exempt.

The legal principles applicable to the situation are entirely clear. Article IX, Section 1, of the Constitution permits the General Assembly to exempt from taxation public property used for public purposes. Undoubtedly the portions of the Airport employed in its actual operation - the landing fields, runways, ramps, hangars, ticket offices, waiting room for passengers, management offices, control tower, repair shops and the like - represent a public use which properly exempts them from taxation; this is conceded by all the parties. There is likewise no question but that property the use of which is reasonably necessary for the efficient operation of the Airport, even though not indispensable or essential thereto, is also entitled to exemption. Nor can such property be denied exemption merely because it is rented out by the Airport and thereby yields a return which serves to reduce expenses, because, where the primary and principal use to which property is put is public, the mere fact that an income is incidentally derived from it does not affect its character as property devoted to a public use: Commonwealth of Pennsylvania, State Employes' Retirement System v. Dauphin County, 335 Pa. 177, 183, 6 A.2d 870, 873; New Castle v. Lawrence County, 353 Pa. 175, 182, 44 A.2d 589, 593; Pittsburgh Public Parking Authority v. Board of Property Assessment, Appeals and Review, 377 Pa. 274, 279, 280, 282, 105 A.2d 165, 167, 168, 169. On the other hand, however, there is equally no doubt but that property, even though owned by a body ordinarily tax exempt, is taxable if used by it for commercial purposes, or if rented to a lessee for a purely business enterprise and not a public use; this is true even though the rentals or other proceeds from the property are devoted to the tax exempt activities of the lessor: Philadelphia v. Barber, 160 Pa. 123, 28 A. 644; Dougherty, Trustee v. Philadelphia, 314 Pa. 298, 171 A. 583; Young Men's Christian Association of Germantown v. Philadelphia, 323 Pa. 401, 187 A. 204; Pittsburgh School District v. Allegheny County, 347 Pa. 101, 31 A.2d 707; Kittanning Borough v. Armstrong County, 347 Pa. 108, 31 A.2d 710; Pittsburgh v. Allegheny County, 351 Pa. 345, 41 A.2d 639; Pittsburgh Public Parking Authority v. Board of Property Assessment, Appeals and Review, 377 Pa. 274, 282-284, 105 A.2d 165, 169; West View Borough Municipal Authority Appeal, 381 Pa. 416, 113 A.2d 307; Freeport School District v. County of Armstrong, 162 Pa.Super. 237, 57 A.2d 692.

It was said in the West View Borough Municipal Authority Appeal, (p. 420, A. p. 309): "The controlling test is, not merely whether the property or part of it has been rented out, but whether the use of the part so leased is for a public or a private purpose. It is the use of the property, and not the use of the proceeds from the property, which determines whether tax exemption may constitutionally be granted."

Applying these principles, then, to the...